The deal is still subject to regulatory sign-off and upon completion will crystallise a loss of approximately €800m (£690m) on the books of the German bank.

Phoenix's chief executive Clive Bannister described the purchase – which would be funded through a rights issue of £735m and raising bank debt of £250m – as "pivotal" and championed what it saw as good value for money, referring to it as an "attractively-priced deal".

He added that bringing Abbey Life under its umbrella would ultimately bolster its cash position and enable it to grow proposed dividends. Phoenix's share price was up nearly 3.5 per cent in late-morning trading.

Some 735,000 policyholders will be moved under the Phoenix umbrella with associated assets totalling £10bn. In May, Phoenix purchased Axa Wealth's pension and protection division from Sun Life for £375m – well below the £500m pricetag that had previously be anticipated.

Analysts at Shore Capital hailed the news. Eamonn Flanagan said:

Phoenix has finally announced the acquisition of Abbey Life in a well-structured, neat and value-enhancing deal.

Indeed, this is the deal we have been waiting for, delivering ‘proof of concept’ for this management team and value for shareholders. With this deal following close on the heels of the AXA Wealth deal, this management team has finally ‘come of age’.